Secured Credit Cards- Consumer Tips By Amy Cooper-Arnold

Whether you have no credit or damaged credit, secured credit cards are a good tool for building a good credit history.

Several months ago Tom, a member of CreditBoards.com, filed for a Chapter 7 Bankruptcy. Now he is in the process of rebuilding his credit history. It's a task that is not easy, but with patient persistence he is seeing progress already. Daily he checks his credit score and is slowly seeing improvement.

1 - In addition to correcting every mistake, even the smallest ones, on his credit report, he is using a secured credit card.

2 - This secured card is an important tool in the overall process of building or rebuilding credit.

Who should consider a secured credit card?

Someone who has no credit history.

Someone with a damaged credit history.

What is a secured credit card?

Secured cards are credit cards opened with a deposit into a savings account, money market or certificate of deposit. The amount of deposit required varies from card to card, but generally minimum amounts range from $250 - $500. These funds are considered your security and will even earn a little interest since they are being held in a savings account. Your credit limit is determined by the amount you deposit into the savings account. Sometimes the limit will be for the full amount of the deposit; other times it will be a percentage of the total.

It is important to keep in mind that a secured card is a credit card, not a debit card. If full payments are not made each month, then interest is charged on the outstanding balance. And the lending institution uses the security money to pay off the debt only as a last resort. Even though the card is secured, it is still possible to damage credit.

What are the benefits of a secured credit card?

Establishing credit. If you have never had a credit card, a good first step in establishing good credit is applying for a secured credit card. Assistant Professor of Economics at Austin Peay State University in Clarksville, TN, Jerry Plummer says, "A secured card is most useful for the person starting out on their credit history, since it says that the person is willing to take the extra step to establish credit."

Reestablishing credit. If your credit history is damaged, you may only be able to qualify for a secured credit card. Using this secured card appropriately and within the set parameters will help rebuild your credit and qualify you for an unsecured card. If you have had to file for bankruptcy, however, you may not qualify until it has been discharged.

Preset limit cannot be exceeded. If poor spending habits were part of the cause for bad credit, then a secured credit card will help keep spending in check.

Useful for transactions that require a credit card. Hotels and car rentals require the use of a credit card. If you don't qualify for an unsecured card but you do for a secured card, then you are still able to make the transaction.

What should I look for or avoid when shopping for a secured credit card?

Fees. This is the area you will really want to research when shopping for a secured credit card. Some cards will come with fees that run into the hundreds of dollars, eating away much of the credit you secured with the savings account. Professor Plummer says a card with no fee is the best, but a small one-time fee can be okay. Annual fees for attractive secured cards typically range from $20-$35. Be sure to watch out for hidden fees such as "registration charges" and "setup fees."

Interest Rate. Just because you have no or poor credit doesn't mean you have to settle for the highest interest rate. Interest rates for attractive secured cards should not exceed 19%. Shop around and get the most competitive rate available.

Read the fine print. Linda Tucker, Director of Education for Consumer Credit Counseling Service for Arkansas and Memphis, TN, stresses the importance of reading the fine print. Doing so will let you know your exact obligations to the issuing company: for example, the grace period, what happens if you don't make a full payment, and what fees are attached if you don't make the full payment. Understanding these details will help make sure you are not further damaging your credit.

Fraudulent Offers. As with unsecured cards you need to watch out for fraudulent offers.The Federal Trade Commission gives the following advice to protect yourself from credit card fraud:

• Offers of easy credit. No one can guarantee to get you credit. Before deciding whether to give you a credit card, legitimate credit providers examine your credit report.


• A call to a '900' number for a credit card. You pay for calls with a '900' prefix -- and you may never receive a credit card.


• Credit cards offered by "credit repair" companies or "credit clinics." These businesses also may offer to clean up your credit history for a fee. However, you can correct genuine mistakes or outdated information yourself by contacting credit bureaus directly. Remember that only time and good credit habits will restore your credit worthiness.

When will I qualify for an unsecured credit card?

It can take several months to see an improvement in your credit history. Bankrate says it's a good indicator when you start receiving flyers in the mail for unsecured cards that your credit is improving. However, it's a good idea to continue taking things slowly. Using a secured card will help you learn healthy habits so that when you do get an unsecured credit card you remain in control of your spending and credit.

Where can I find a secured credit card?

Most companies don't advertise secured cards. But you can visit the Card Reports section of http://www.CardRatings.com to find out where and how to apply. Click on the link entitled "Cards for Consumers with Poor or No Credit".

Other tips

Tom recommends sticking with only one or two cards and keeping spending to a minimum. The goal is to pay the card off each month.

Tucker emphasizes the importance of paying the amount due each month; otherwise late fees can be charged, interest rates raised, privileges lost, and credit history negatively affected.

Make sure you are getting a credit card as opposed to a gas card or a department store card.

Make sure a reputable bank or credit union, even a local one, is issuing the card. And, don't automatically assume a bank is issuing the card.

Not all issuers report to the three major credit agencies (Experian, Equifax, and TransUnion). It's important to get a card that does report to all three agencies; otherwise you will be wasting your time. Fortunately, secured cards normally report to the credit agencies just like unsecured cards (you should verify this before applying).

If you have filed for bankruptcy, you may need to wait until it has been discharged before qualifying for a secured card.

Get one only if you cannot get credit, since you have no credit record; or if you have poor credit. Plummer says, "Many companies will not even count them as credit, such as automobile F&I (Finance and Insurance) people, although they will not admit it." So, if you don't really need a secured card, you will be doing more harm than good.

Finally, whatever situation you are in, no credit or poor credit, the best way to build good credit is to set up a budget and then stick with it.

1 You can pay membership fees to any one of the three credit bureaus - Experian, TransUnion, and Equifax- to be able to check your credit score online daily. Visit our Credit Information section for more details. Tom recommends purchasing Microsoft Money 2004, which comes with a one-year membership to Experian (value of $99.00).

2 To find out more about correcting errors on your credit report, read our article How to Correct Mixed or Split Credit Reports.

Rebuild & Keep Good Credit Ratings by Understanding Your Credit Cards

Secured Credit Card is similar to a prepaid credit card since the funds you are using are actually yours and not the issuer of the credit card. Generally people who apply for secured credit card or prepaid credit card are people with poor credit or unemployed. Prepaid Credit Card spending limit is the amount of money you loaded to the card. There are no interest or finance charges on a prepaid card. With secured credit card, your credit line could be from 50% to 100% of your deposit depending on the institution giving you the secured credit. Therefore the company giving you the secured credit card has zero risk.

Secured credit card can be very beneficial because it gives you an opportunity to rebuild your credit history and you are able to make purchases just as if you had an unsecured credit card. Many companies require that you have a credit card to make purchases, such as car rental, airline tickets, etc. Ensure that the company issuing the secured credit, routinely reports customers' payment history to any of the three main credit bureaus namely Experian, Equifax and Trans Union. This reporting to the credit bureaus will rebuild your credit history over time.

Closing unnecessary accounts and consolidating your bills to make payments more manageable could be an advantage financially. By not applying for too much credit within a short period of time is another factor that will help in rebuilding your credit rating. Additionally, even though secured credit is like prepaid cards, they do have certain fees attached.
Benefits are similar to that of an unsecured credit card, such as usually being paid interest on your balance in the bank, using Automated Teller Machines (ATM) to make deposits, withdrawals, and making purchases at participating merchants. Following the above steps will strengthen your credit rating.

Unsecured Credit Cards are issued to individuals with good to excellent credit rating. Credit ratings depend on certain criteria, such as one's ability to repay loans. These criteria include payment history, employment history, and financial stability. Individuals with excellent credit will most likely receive a lower interest rate. A major factor in maintaining excellent credit is making your loan payments on time thus avoiding late fee penalties.

Customers should read the credit agreement to ensure that they understand their obligation to the creditor. Making payments on time will strengthen your credit rating. Unsecured credit cards has numerous advantages such as low interest rates, high credit limit, business name options, no annual fees, and low APRs on balance transfers up to 12 months. Closing unnecessary accounts and consolidating your bills to make payments more manageable could be an advantage financially. By not applying for too much credit within a short period of time is another factor that will help in maintaining a good credit rating.

Rebuilding your credit takes time, patience, and consistency. If you consistently pay your bills on time, you will see an improvement in your credit ratings over time. There are no quick fixes for improving your credit report except for mistakes or inaccuracies that can be corrected, hopefully in your favor. Your credit information is maintained by the credit bureaus namely Experience, Equifax, and Trans Union for seven years. Therefore poor credit information will remain on your report for seven years. The good thing is that as negative information disappears with positive information, this will definitely rebuild your credit rating.

Applying for secured credit card can be very beneficial because it gives you an opportunity to rebuild your credit history, and you are able to make purchases just as if you had an unsecured credit card. Many companies require that you have a credit card to make purchases, such as car rental, airline tickets, etc. Ensure that the company issuing the secured credit, routinely reports customers' payment history to any of the three main credit bureaus namely Experience, Equifax and Trans Union. This reporting to the credit bureaus will rebuild your credit history over time.

Business Credit Card
Business credit cards are very popular for small business owners because of the many benefits they offer. Benefits includes 0% Intro APR on balance transfers, no annual fees, high credit limit, low interest rates, cash rewards, bonus miles, free online account management to choosing card design etc., At iCreditOnline.com we have some of the best business credit cards from American Express, Advantage, Chase, Bank One, Bank of America, Discover, Citibank, Household Bank and more, with online credit card approval. Why waste time going to a bank when you can get a decision in less than 60 seconds with secure online credit card application. Online Credit Card Approval with Online Credit Card Application is fast and easy!

Student Credit Card

Having a student credit card while still living at home or attending school away from home can be an advantage. It gives the student the opportunity to establish credit at an early age and to start asserting their independence. It comes in handy in case of emergency, it is less trouble and safer to carry a student credit card than to carry cash. Parents find student credit cards to be very convenient. They are able to make deposits to their children's account while they are away from home. Students should be careful with their credit card receipts to avoid identity thief.

If you consistently pay your bills on time, obtaining students credit cards is a good way to established credit rating and start building a good credit history while in school. Establishing and maintaining a good credit rating will make it easy to purchase a car, a home or obtaining a personal loan in the future. For students who are not committed to their financial obligation, getting a student credit card is not a good idea. Running up balances, finding yourself in debt, unable to make monthly payments will destroy your credit rating.

Student's credit cards generally have high interest rates. At iCreditOnline.com we offer some of the best student credit cards from Chase and Discover with 0% APR introductory rate for 6 months, no annual fees and online account access. Online credit card approval with online credit card application is fast and easy!

Explanation of some of the credit cards we offer:

0% Intro APR Credit Card or Balance Transfer Credit Card gives you the benefit of using this credit card without making any interest payment on the principal for a stated period of time. This credit card is marketed to individuals with good credit rating who want to transfer balance from a high interest credit card to a 0% intro APR credit card.

Cash Rewards or Cash Back Credit Card earns a percentage on purchases made. This reward or cash back is credited to your account.

Debit Card takes the place of carrying a checkbook or cash. This card is used like a credit card with certain limitations, such as not being able to rent a car. Purchase transactions are contingent upon having enough funds in your checking or savings account to cover the purchase. Verification of funds requires entering your Personal Identification Number (PIN) at a point-of-sale terminal.

Low interest credit card saves you money. Having a good credit rating qualifies you for some of the best low APR credit card offers.

Prepaid Credit Card spending limit is the amount of money you loaded to the card. There are no interest or finance charges on a prepaid card. Therefore the company giving you the prepaid credit card has zero risk. Generally people who apply for prepaid credit card are people with poor credit or unemployed.

Secured Credit Card is secured by the amount of funds you have in your account. Your credit line could be from 50% to 100% of your deposit depending on the institution giving you the secured credit.

Unsecured Credit Card is issued to individuals with good to excellent credit rating. Credit ratings depend on certain criteria, such as one's ability to repay loans. These criteria include payment history, employment history, and financial stability. Individuals with excellent credit will most likely receive a lower interest rate and can receive instant online credit card approval. A major factor in maintaining excellent credit is making your loan payments on time thus avoiding late fee penalties.

Travel Rewards Credit Card benefits may include travel accident insurance, free rental car collision/loss damage insurance, rebate on gasoline purchases, frequent flyer points or bonus miles towards airline flights, free quarterly and annual account summaries.

How To Get A Credit Card No Matter How Bad Your Credit Rating

Your credit is bad. Perhaps you have a string of unpaid bills haunting your past. Maybe you declared bankruptcy within the past 10 years, or defaulted on a student loan.

All of the above can block your access to obtaining a major credit card, such as VISA or Mastercard.

But bad credit is not the only reason you can be denied a major credit card. Some people simply have never used credit. People who like to pay cash only, have never financed a car, taken out a college loan, or a mortgage may have zero experience with credit. In that case, most card companies will reject your application, not because you have bad credit -- but because you have no credit rating.

Many women who marry young and do all their borrowing under their husband's name often find themselves with no credit rating after they are widowed or divorced. Thousands of women have been denied loans and credit cards on that basis.

Still other people carry too much debt to be considered a good risk. If you have a car loan, a student loan, a mortgage, two or three -- out cards, you are unlikely to be granted another credit card.

But in any and all of the above cases, you can still obtain a credit card. No matter how bad your credit, and even if you have declared bankruptcy, you can still be granted a VISA or Mastercard with a limit as high as $5,000, if you know the right company to call, and how to make your application.

We are going to reveal these card companies and the methods by which you can obtain a VISA or Mastercard later in this report, but first, let's talk about some of the other things you really should know about credit cards, including annual fees, interest rates, credit reports and more.

Your Credit Rating

How do credit card companies decide if you are a good credit risk or a bad credit risk? Well, it's sort of a Big Brother thing. There are several large agencies in America which track the borrowing and buying behavior of just about every single American who has borrowed money at one time or another.

The four major credit rating agencies are:

CSC Credit Service: (Phone: 800-392-7816)

TRW Information Sys.: (Phone: 800-392-1122)

Equifax: (Phone: 800-685-1111)

Trans Union Corp.: (Phone: 800-851-2674)

When you send in an application for a credit card, the card company contacts one of the above agencies, which pulls your file, if one exists, and let's the company know if you have any bad debts in your background.

If you have never borrowed money or used credit of any kind, your name will not appear in the data base of any of the above. If you have, there will almost certainly be information about you. If you have ever defaulted on a bill, or walked away from a debt owed, that information will be available. If you have never defaulted on a loan, but have made frequent late payments, that is recorded, too, and goes against your credit rating.

25 Percent Error Rate

If this sounds a bit like Big Brother, most would agree with you that it is. It's scary to think that some large anonymous corporation is keeping a file on you, but it's true. Furthermore, they will share your file with any lending institution that wants to know something about you. That's the price you pay to obtain credit. You've heard the statement, "there ain't no such thing as a free lunch."

When it comes to the game of credit, the lunch is definitely not free, neither in the monetary sense, or in the realm of personal freedom.

To top things off, credit agencies make errors in as many as one-fourth (25 percent) of all their reports. At this minute, false information about you may be ruining your credit rating.

To check your credit rating for errors, call the agencies at the numbers I provided above. They will request that you send them a written letter asking for a copy of your credit report. They will send you a copy of the information they have about you.

Now let's look at how card companies make the big bucks -- interest rates.

Interest Rates

A few decades ago there were laws against charging the kinds of interest rates credit cards get today. Exorbitantly high interest rates were called "usury," and were forbidden by federal law. Just 30 years ago loaning money at 20 percent would have landed any banker in prison. Such rates were the territory of loan sharks and organized crime.

Today, however, it's standard business. Some cards have rates approaching 21 percent. Some product manufacturers, such as Apple Computer, have credit plans that push a whopping 23 percent.

Most credit card companies attract customers with super low interest rates, sometimes as easy as 5 percent. But what they only tell you in the fine print, which few people bother to read, it that the interest rate jumps back up after six months. Many cards that start you out at 6 percent soon jump to 18 percent, or higher. By that time, most people have chalked up a balance and are stuck. Most people simply fail to notice when their rate increases. Credit card companies count on that. They like who take no interest in details. If you don't watch them, they'll watch you -- and your wallet -- and dip into it in the most insidious ways.

No Annual Fee Cards

Some credit card companies charge no annual fee for use of their card. Annual fees range from $18 to $55. You pay it every year simply for the privilege of using the card. Other companies charge no annual fee. You might think, then, that this is a better deal. Most often they are not. Cards with no annual fee almost always have a higher interest rate. If you leave a monthly balance, you'll always pay more than the annual fee in interest charges. Only if you never leave an unpaid monthly balance can you benefit form a card with no annual fee.

Perks and Freebies

One of those insidious ways is the offer such perks as frequent flier miles or annual rebates. Use the card so often, and get X amount of frequent flier miles. Use your card, and get credit toward the purchase of an automobile. Is this a good deal? Hardly ever. As you might have guessed, the offer of rebates and gifts is simply an inducement for you to pay super high interest rates. Unless you are a big spender and travel a lot, you'll rarely benefit from this kind of promotion.

Be Choosy

In short, never sign up for a credit card until you compare rates. Shop around. Credit card companies are just as competitive as any other kind of business. That means interest rates that vary widely. In general, never go for a card that is five percent higher than the current prime rate.

How To Get A Lower Rate

What if you are already on the hook with a major credit card with an agonizing rate of interest? Pick up the phone, call your card company, and get tough. Often, if you ask for a lower interest rate, you'll get one -- it's as simple as that.

As further incentive, you can threaten to transfer your balance to another card company with a lower rate. Many card companies are more than willing to take you on as a customer by paying off one of their competitors for you. Of course, you are then beholden to them. That's okay if you score a lower interest rate.

How Anyone Can Get a Credit Card

Now what about all of you "hopeless cases" out there. What if you have deplorable credit, or no credit rating at all. You may have already been turned down by a half-dozen card companies. What can you do?

First, you should think long and hard about why you want a credit card in the first place. If you have a history of bad credit, a credit card may be the last thing you need. Many people feel that credit cards and the debt they lead people into is a modern form of slavery.

Credit cards are almost magically deceptive and alluring. They get at the deepest psychological lever of the human mind -- a lever which allows people to have the feeling they are getting something for free, when in fact, they are paying two, three, four, even ten times as much for that product because of the interest they will pay on each purchase.

On the other hand, not having a credit card is becoming less and less practical in modern America. You can't rent a car without a credit card. Carrying cash is dangerous. Checks are not accepted everywhere -- and traveling to another city or country is extremely difficult without the confidence and identity a credit card brings.

A Secured Card

If you decide you really need and want a credit card despite your past problems with credit, you should get what is called a secured credit card. Even people who have declared bankruptcy are granted secured cards.

A secured card works this way: you pay a lump sum of cash upfront either to your bank or the card company itself, usually from $200 to $2,500. The card company will then grant your credit for up to 150 percent of the amount of your deposit. If you pony up $500, you will be granted a $750 credit line. If you put up $1,000, you will get $1,500 in credit, and so on.

Your deposit money will earn a very nice 4 to 5 percent interest while it is held as collateral by your bank or the card company. The deposit money acts like a buffer for the lender. In the event you default on your card debt, the lender gets to keep your money. They may still incur a net loss, but the risk is far less.

Additionally, the interest you gain on your deposit will offset the interest on your monthly balance if you have one. If you get a secured card with an 18 percent interest rate, you can feel good about the fact that your pre-payment is earning 5 percent.

Which card companies offer secured credit card plans?

The following:

(At the time of writing, these details are correct. If they change by any chance, you'll have to look up the institutions in the Yellow Pages, or simply do a search online.)

CitiBank -- Minimum deposit is $300, which earns 4%.

Call: 800-933-2484

Federal Savings Bank -- Minimum deposit is $250, which earn 2.5%.

Call 800-285-9090

Orchard Bank -- Minimum deposit is $400, which pays 4%

Call 800-873-7307

Key Federal -- Minimum deposit is $300, which earns from 4% to 5%.

Call 800-228-2230

Signet Bank -- Minimum deposit is $200, which earns 5%.

Call 800-333-7116.

Using a secured credit card can also help repair your credit rating if you use it responsibly over a number of years.

Even if you do not have bad credit, a secured credit card is recommended for anyone who wants the safety and convenience of a credit card. Secured cards are a safe, responsible way to control your spending, and you actually earn money though interest on your deposit while you enjoy the use of your card.

Student Credit Cards Explained

Various people have different needs. So the credit card suppliers too have designed different type of cards. Besides the normal credit cards, there are small business cards for small business and then there are student credit cards which are designed especially for students.

Now, what is different about the student credit cards?

You could say not much, since all credit cards work in pretty much the same way and are used for more or less same purposes. However there are 2 main differences with the student credit cards and these differences are on the 2 main aspects i.e. Credit limit and APR.

The credit limit for student credit cards is generally very low. This typically ranges from $500 to $1000 per month. Some people might argue the reason for such discrimination. Well, the reason is very clear and obvious. Most of the students applying for these credit cards have never used a credit card in their life so neither do they have a credit rating and nor the knowledge about credit cards. While the former is what the credit card suppliers look for before supplying the credit card, the latter is what the credit card holder would like to acquire. Both the purposes are met by keeping a lower credit limit. The credit card supplier reduces the risk that they are taking by issuing a credit card to someone who has never used one and has no credit rating. It's good for the credit card holder too since this reduces their risk of damage which can be caused by limited or no knowledge of credit cards and by bad spending habits. Moreover, this credit limit would be sufficient for the needs of a student in general.

The APR on the student credit cards is generally higher than that on the normal credit cards. Again the reason for this is same as that for lower credit limit i.e. the credit card company or the credit card supplier is after all into business and has to take steps to mitigate any possible risks including the risk arising from issuing a credit card to someone who is naïve in terms of credit card knowledge.

The credit card companies might also keep some stricter terms and conditions on the student credit cards and generally require a parent or a guardian's signature as a guarantor.

Since credit cards are more of a necessity than a convenience in today's world, the student credit cards are much recommended, especially as a learning tool in getting the students prepared for the life. Due to their inherent characteristics of low credit limit etc, student credit cards cannot lead students into a totally irreversible debt situation. Students should read all the instructions supplied with their student credit card. This first credit card will teach them how to protect themselves from credit card fraud, where all to use their credit card, how to control their spending, what the various membership benefits are etc. The earlier they learn these things the better it is.

Moreover, the student credit card will also help you in developing a good credit rating. You shouldn't take the student credit cards lightly. If you overspend on your student credit card or default on your credit card bill payments, you will not only end up paying interest on your credit card balance but also spoil your credit rating. Remember that a bad credit rating will not only hamper your chances of getting another credit card later in your life but will also lead to problems in approval of your mortgage/car-loan applications etc.

So student credit cards are a surely a good way for students to start with credit cards.

Student Credit Card Debt: A Survival Guide for Students

College is the last care free step before real life begins, or at least it should be. Students should be able to go to sleep each night with the only pressing responsibility being the English exam tomorrow morning. They should still get to live in a world where although they can't afford much more than the occasional late night drive through Taco Bell or downloading the latest hit single, at least they aren't worrying yet about paying a mortgage, most forms of insurance, utility bills, or the college loan that is allowing them to get an education.

Unfortunately, for many college students this is not the case. Many are already burdened with financial pressure because they are accruing credit card debt, in some cases over $7,000 worth of it. Increasingly, students are even coming to campus with credit card debt in hand. Consolidated Credit Counseling Services Inc. reports that 20% of freshman got their credit card in high school and nearly 40% sign up for one in their first year at college. With the abundance of on-campus, mail and Internet card offers giving low introductory rates, freebies, and bonus airline miles, it's not surprising to find that according to a 2001 Nellie Mae study 83% of all undergraduate students have at least one credit card and carry an average balance of $2,327.

The problem of high credit card debt has many implications for a student. Some end up dropping out of college all together so they can work full-time just to pay credit card bills. If they are able to stay in school, but have in the process ruined their credit rating, it can affect their ability to rent an apartment, afford insurance and even get the job that will help them to pay off their debt. Even relationships suffer as a result of financial stress. There is also a psychological affect on students. The stress can lead students into depression, and in a few cases has been a contributing factor to suicide.

Of course it hasn't always been like this. According to Dr. Robert D. Manning, Professor at Rochester Institute of Technology and author of Credit Card Nation, in the late 1980s student credit card limits were around $300-$500 and parents were required to co-sign. But when credit card companies began making a lot of money during the 1991 economic recession, they started looking for new markets and found it in the student population. Issuers dropped the co-signing requirement and started raising limits, which, when combined with parents' increasing financial pressures and higher costs of education, gave students a way to fund themselves through college.

And students are an easy market to tap into. In his article "Credit Cards on Campus," Manning writes, "Credit card companies encourage fantasies of easy money because students are so profitable: teens have financial naiveté, high material expectations, and responsiveness to relatively low-cost marketing campaigns, high potential earnings, and future demand for financial services."

Credit companies advertising to the vulnerabilities of young students is not the only factor that goes into the current trend. Most students simply have not received the education in personal finances and credit card management that they need to meet the onslaught of offers. According to Consolidated Credit Counseling Services, Inc only 15% of high school students take a personal finance class. And, according to the Jump$tart Coalition for Personal Financial Literacy, a non-profit organization which promotes financial literacy at the K-12 level, parents for a variety of reasons are not talking to their children about the privilege and responsibility that goes along with using a credit card.

Dr. Carol Carolan, Executive Director and Founder of the Center for Student Credit Card Education, says that the single best thing parents can do to help their children avoid the pitfalls of credit card debt is educate them. Parents need to talk to their children about it early on and regularly. Dr. Carolan suggests the following tips for parents.

• When a child has reached an appropriate level of maturity and understanding of personal finances, co-signing a credit card can be very beneficial.


• Get a credit card with a low limit and no annual fees (visit the "Card Reports" section of our website to comparison shop for student credit cards).


• Discuss with your child the details of the credit card including interest rate on purchases and cash advances.
  Review all the expenses every month.


• Show your child what finance charges might apply if the balance is not paid in full and on time. This includes any interest, fees, and penalties.


• Be a good role model.

Experts don't all agree on the appropriate age for a first credit card. Dr. Manning, for instance, argues in his article Credit Cards on Campus that having them at an earlier age may actually result in fewer debt problems later on." Other experts argue that waiting until the junior or senior year in college is best. The bottom line parents need to realize is that once students reach the college campus, they will be inundated with credit card offers and will be able to get a card regardless if they are supported financially solely by their parents.

And talking with students involves more than mere calculations of fees, interest rates, and balances. Students need to understand the messages they receive through advertising, the difference between a want and a need, as well as the lure of money. Give students a healthy, realistic perspective of money and material possessions and they will be better equipped to make wise decisions.

Universities and colleges play a huge role in the current trend of high student credit card debt. Some invite credit card issuers onto campus because they receive revenue as well. But others are starting to recognize the problem and are restricting the activities of credit card companies on campuses. Manning states in his book Credit Card Nation, that "During the academic year 1999-2000, over 400 colleges and universities formulated official policies against on-campus credit card marketing and nearly 600 other schools are considering similar restrictions."

Some institutions like Rochester Institute of Technology (RIT) and the University of Central (UCA) Arkansas are even beginning to require classes in personal and consumer finances. Mary Ann Campbell, CFP, professor of personal finance at UCA and professional speaker with Money Magic, Inc., has a mission to educate students, educators, and adults about money. She is currently working on her dissertation about college students and credit card debt. Campbell is researching the best methods of reaching college students through a high impact presentation warning them of the perils and privileges of plastic. Like other experts, Campbell is not against students having credit cards. In fact, she says it is easier to get one as a student and can help them build the good credit history needed after graduation. But students do need to be educated. Campbell gives the following tips and reminders for students.

• There is true magic to compound interest when it's working for you (as in an investment or savings account), but true devastation when it's working against you (as in credit card debt). Even when you buy something on sale, the interest alone can double the price.


• Account for everything. Keep records of each credit card including the interest rates, fees, balances, due dates and purchases. Campbell suggests a good way to do this is to setup a spreadsheet in Excel. This will also keep you organized so you don't miss another payment.


• The only way to get out of debt is to stop charging and always pay more than the minimum. If more than one credit card has an outstanding balance, then begin paying off the one with the highest interest rate first, then go to the next highest interest card, and so on.


• If in trouble, talk about it with someone you trust and respect. This could be a parent, teacher, or friend. Hiding it doesn't make it go away.


• Credit scores can make all the difference in the world for good or bad. It can take many years to recover from a bad credit score.


• Learning to use credit cards responsibly is a gift. Seek to gain knowledge and wisdom. Credit is a privilege and it is the student's personal responsibility not to let it become a peril. Campbell says, "The magic comes from you."


• While in college, students need to think outside the box, but live financially within the box.

Credit cards can be an invaluable tool for a student. While providing security and convenience, if used wisely a student will build the good credit rating that is needed to secure other consumer loans, jobs, and lower insurance rates after graduation. Dwayne Blew, a member of CreditBoards, a forum dedicated to credit issues, is one example of a student who didn't buy things he didn't need and paid his credit card balance in full each month during college. Now he is reaping the benefits of a good credit score. Dwayne says, "One of the reasons you're going to college is to improve your lifestyle once you graduate. After putting so much effort into school, why let something small like a credit card end up ruining it all?"

Many excellent resources exist to help students both avoid and get out of the credit card debt trap.

• Comparing credit cards is an important step in finding the best one to suit your needs. CardRatings.com makes this search simple and easy by allowing you to research the best rated student credit cards.


• Consider utilizing the services of a nonprofit credit counseling service. Be very careful when considering a credit counseling service, though, as many counseling services are scams, including nonprofit services.


• Consolidated Credit Counseling Services, Inc. has a free, downloadable Budgeting Guide for students.


• Dr. Carolan has written a booklet titled The ABCs of Credit Card Finance - Essential Facts for Students that can be ordered online and it will be mailed to individuals free of charge.


• Message boards or forums are a great source of information. You can post questions, concerns, or comments and a real person will respond with real life information. Campbell says they are a gift and can even become a support group. You can join the CardRatings.com Message Board for free.


• Even if your school doesn't require a personal finance class, take one if it's offered.


• 
  http://www.debtsmart.com/, created by Scott Bilker, author of the best-selling books Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart, contains several tools to help consumers deal with credit card debt.

The financial decisions students make in college have a long lasting impact on their future. They are learning how to use and manage various financial tools vital for life in the "real world". When used wisely, credit cards are one tool that can open the doors for a life unencumbered by financial burdens.

Bad Credit and No Credit Credit Cards: Avoid Hidden Fees and Rebuild Your Credit Cheaply

Individuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.

There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current "bad credit" credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.

"Bad Credit" Credit Card #1: This credit card charges a very low interest rate for an unsecured credit card. However, your first fine print glimpse reveals that there is a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we're up to $124 in expenses. That's got to be it, right? No. Add in another $48 for the annual fee and $6 per month in account maintenance fees. That's brings the cost of your new credit card to $244 the first year, and $120 each additional year. This is no small change, and a card such as this should be considered only if you cannot be accepted for a better unsecured credit card for bad credit.

"Bad Credit" Credit Card #2: This credit card charges a very high interest rate for an unsecured credit card. This can't be good. But the setup fee is only $29. Maybe this card isn't so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107. Maybe we've found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but you will also pay $228 a year just to maintain the credit card. There has to be a better offer.

"Bad Credit" Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer's review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintenance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.

Clearly, there are substantial difference between "bad credit" credit cards. Of the three offers we have examined, only one doesn't take you to the cleaners. In fact, "bad credit" credit card #3 provides great value. All positive changes to your credit history and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, but in the long term, rebuilding your credit with a "bad credit" credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit in the first place.

How to Save 1000s of $$$ with Low Rate Credit Cards

Credit card balances are rising faster than consumers can pay them off. And with a high interest rate card it can be difficult to even make a dent in debt. According to Consumer Action, a non-profit, membership-based organization, a March 2004 survey revealed that only 39% of the people said they pay their credit card balance in full each month. So if you are like 61% of everyone surveyed and carry a balance from month to month, then your number one priority for a credit card should be a low interest rate.

What is considered a low interest rate

According to Linda Sherry, editorial director and spokesperson for Consumer Action, anything below 10% is an attractive rate in today's market.

Look at the Savings

Are the savings really all that much with a low
rate credit card? Here's an example to show you just how much you will save.

Let's say you have a $2500 balance on your credit
card, you make the minimum 2.5% payment, and you don't add any new charges to the card. With an 18% APR (annual percentage rate) it would take you 20.3 years to pay the card off at the
cost of $3365.51 in interest alone.

If you are able to lower that interest rate to the
average standard, fixed rate of 12.99%* you will reduce the time it takes to pay off the debt to 15.2 years and your total interest will be $1732.95--a 48.5% savings over the 18% APR.

But if you can qualify for a 9% APR, your
debt will be paid off in 12.6 years with a total of $977.48 in interest--a whopping 71% savings over the 18% card. And if you commit to paying the first month's minimum payment of $62.50 each month until the entire balance is paid off, then you will shave off another 8.6 years and another $494.01 in interest.

Who can get the lowest rates

In order to get the lowest advertised you will need a good credit rating. While most issuers have their own criteria for a good credit rating, Sherry says that in general a FICO score of
675+ is good and 750+ is excellent. If you are in a situation where you need to raise your current score, please read our article is a Credit Score Calculated and How Can I Improve My
Credit Score?

Where you Can Find the Lowest Rates

If you do have a good to excellent credit rating, then according to Gerri Detweiler, founder of DebtConsolidationRX.com and author of The Ultimate Credit Handbook, if you are paying more than 10-12% you need to start searching for a lower rate card and there are several different avenues of approach.

Read Your Mail

Often times the best offers come right to your mailbox. But you need to read through the offer very carefully to determine if it is an introductory rate or a long-term rate (ongoing). Also, Sherry says you need to look for the words "you are
pre-approved" as opposed to "you are invited to apply." If it is an invitation only, you may not qualify for the rate advertised, and you won't know until after you apply. You should also be aware that you may not get the rate advertised in a pre-approved offer. In fact, you may even be declined for the card. Please be aware that almost all of these mail offers are marketing schemes rather than true pre-approved offers.

Learn to Negotiate

Mail offers and other low rate credit cards you carry can come in handy as a negotiating tool with your current card issuer. Scott Bilker, creator of DebtSmart.com and author of Talk Your Way out of Credit Card Debt,
suggests calling your issuer and letting them know you have better offers elsewhere and that you are considering
switching to another card if they won't lower your rate.

Don't be afraid to take back control...in today's saturated market, credit card issuers are looking to hang onto customers. If you want to know exactly what to say to a credit card customer service rep., check out Bilker's book which contains transcripts from actual telephone conversations with reps.

Local Banks and Credit Unions

When shopping for a low rate credit card, looking to a local bank or credit union may be a good option. In addition to a good rate you may find the customer service more personal and appealing. But beware of banks that offer a rate significantly lower than the big banks or below the , especially if you know your credit is not good enough to qualify. Another thing to consider is that introductory rate offers from local banks and credit unions are not generally as aggressive as introductory offers from larger banks.

Associations

Sherry says it's a good idea to investigate any credit card offers that may come through associations you are part of such as alumni groups. These large groups often have more muscle to negotiate special terms for their members. For example, for their members, AARP got the binding arbitration clause, which has come under scrutiny recently by consumer advocates, left out off the terms and conditions of the AARP credit card.

Online

Finally, CardRatings.com offers detailed comparisons of the lowest rate cards currently available. Browse our
Card Reports section and conveniently apply online to start reducing your interest charges.

So Many Choices...Some things to Consider

Variable vs. Fixed Rate Credit Cards

Most of the low rate credit cards offered today are variable rate cards. This means the APR is attached to an index such as Prime or LIBOR (London Inter Bank Offered Rate) and changes according to changes in the index. The credit card terms and conditions will say something like "Prime + 4%." So if Prime is 6%, then your interest rate is 10%.

And although not currently common, it is still good to be aware that issuers can apply a floor, or minimum, to the rate. For example, if the terms are Prime + 4% with a floor of 10% and Prime drops to 5% you would get a 10% APR rather than the 9%. According to Sherry this was more common 3 years ago when interest rates really dropped, but became a less frequent practice as consumers started pressuring issuers to ban floors.

Even with low rate cards advertised as having fixed rates, keep in mind credit card issuers reserve the right to change the terms and conditions, including the APR, of the card
for virtually any reason at any time. If changes do affect your fixed APR card, your issuer is normally required to give you 15 days written notice; so it's very important to open all your mail because if you happen to throw out the notice, then you will forfeit any right you may be given to opt-out of the rate increase. And Sherry says once you make a purchase under
the new rate terms, even if you didn't read the notice, you have agreed to accept the new terms and conditions.

Credit card issuers can even change a fixed rate card to a variable card and vice versa with little notice. Fixed rates are rarely fixed forever. In the credit card world
Bilker defines forever as the time it takes to pay something off. :0) The only real advantage of a fixed rate card is the rate usually doesn't increase as often as a variable rate card in a rising rate environment (this can work against you if rates are falling).

Is the low rate for purchases only?

Most of the time a low APR applies to purchases, but not cash advances. The cash advance APR is generally much higher. If you do end up taking a cash advance on a low rate card you need to be aware that issuers normally apply payments to the
balance with the lowest APR--so your cash advance balance will keep earning interest (usually at a much higher rate) until your purchase balance is paid off. However, a few cards do come with a low cash advance APR, so make sure you read all the fine print.

Fees

Annual fees are pretty much a thing of the past. The one notable exception is credit cards that have very low ongoing rates, usually defined as being within 2 points of Prime. If you do come across a card offer that has an annual fee and rate within 2 points or so of Prime, then use our online
calculators to compare the cost savings to a card without an annual fee and a little higher APR.

If you plan to transfer a balance to a low rate card, then determine how much a fee you will pay before initiating the transfer. Detweiler says a cap of $25 on balance transfer fees is generally okay, but if they charge a fee of 3-4% with no cap it's probably not worthwhile. Doing a few calculations will help
you determine if the savings are there.

Using a Low Rate Card to Your Advantage

The point of using a low rate credit card is to save you money if you carry a balance month to month. Here are some tips to make sure you are maximizing its usefulness.

Make your Payments Early

If your credit card issuer uses the average daily balance method to calculate interest (see glossary below), then you will benefit by making payments before the due date because it reduces the average daily balance your monthly interest is based on.

Manage your Credit Well

With a low rate credit card you need to make sure your payments are always on time, you never exceed the credit limit, and that your payment will be honored by your bank, otherwise you will end up paying the default, or penalty, interest rate which is significantly higher than the normal purchase APR.

Also, don't max out the limit (i.e. carry a balance that is close to your credit limit) on your new low rate card because that will adversely affect your credit rating; and if your credit rating goes down, many issuers have the right to raise your APR. Detweiler says to use no more than 50% of your credit limit on any given card.

In addition, defaults on any other credit accounts can affect your low rate credit card. Most credit card issuers have a universal default clause in their terms and conditions
meaning that if you default with any other creditor (not just another credit card company) they reserve the right to raise your APR to 20+% in some cases -- read our Universal
Default article for more information. Sherry says they have the right to pull your credit score and review your account. If they find any reason to raise your rate they will--as Bilker says, they are just waiting for the opportunity to do so. And even though the Truth in Lending Act requires they give you notice of an increased rate it doesn't have to be in advance. So make sure you check your statement every month for any changes in the rates.

Tips for the Savvy Consumer

• Consider consolidating higher rate credit cards to your lower rate credit cards. It's important to keep in mind, however, that credit card companies usually apply payments to the balance with the lowest APR. This means if your low rate credit card has an introductory 0% balance transfer APR and you are carrying a monthly balance on purchases, then your payments will reduce the 0% balance transfer first while you continue paying interest on purchases--the resulting APR is called your effective rate and it is normally much higher than the balance transfer APR. The effective APR should be indicated on your monthly statement.


• Detweiler says if you really want to save as much money as possible consider using a reward card for a big-ticket item. After you earn the reward, immediately transfer the balance to a low rate credit card. This technique requires self-discpline and attention to detail.

Important Terms to KnowCredit card issuers use their own language, which can be confusing. Below is a table of some important terms you need to
understand as you shop for the lowest rate credit card.
Purchase APR Annual Percentage Rate charged when you carry a balance month to month on any purchases made with your card.

Balance Transfer APR: APR for balance transfers, typically different than the purchase APR

Default/Penalty APR: APR charged if you default on the account. For example, making a late payment, exceeding your credit limit, or bank not honoring your payment.

Variable Rate: Interest rate that changes according to the index (i.e. Prime and LIBOR) it is tied to.

Fixed Rate: Interest rate that does not change. However, in the credit card world there is no such thing as a truly fixed rate as a change in the terms and conditions can change a rate at any time.

Prime: The lowest interest rate banks charge their most credit worthy customers, usually corporations. A common index used for variable rate credit cards.

LIBOR: London Inter-bank Offered Rate, the interest rate banks borrow money from other banks in the London wholesale money market, usually lower than Prime. Another index used for variable rate credit cards.

Monthly periodic rate: Monthly interest rate. APR divided by 12 (number of months in a year).

Average Daily Balance: Daily totals of charges and payments divided by the number of days in the billing cycle.

Average Daily Balance Method: Method for calculating interest--average daily balance multiplied by the monthly periodic rate

Two-Cycle Billing Method: Method for calculating interest based on the sum of the average daily balance for the previous and current billing cycle.

Amount Due: Refers to the minimum amount due (usually around 2-4% of the entire balance)

Finance Charge: Interest charge on outstanding credit card balances.

FICO Score: Fair Isaac & Co., the company that develops credit scores (aka FICO scores) used by 75% of mortgage lenders and many credit card issuers.

With a little bit of knowledge beforehand you will be able to shop for the best low rate credit card for your needs. Investing a little bit of time doing so could save you 1000s of dollars and will definitely be time well spent!

10 Most Popular Types Of Credit Cards That You Should Know

Credit cards nowadays are fast becoming the most effective means of financial transaction. The convenience and time saving benefits along with the safety and reliability they offer make them the popular choice. The wide network of shops, malls and retail outlets encourage a vast populace to use them extensively. As the consumer base for credit cards is expanding rapidly, more and more people are getting overwhelmed by the diversity of offers. This article takes a look at the popular credit card prevailing in the market and their features.

Balance transfer credit cards

Allow customers to transfer a higher interest credit card balance onto a credit card with a lower interest rate.The terms of balance transfer credit cards vary greatly with credit card issuer and offer. It will be better to know these terms before deciding on a balance transfer credit card.

Low interest credit cards

These cards offer a either a low introductory APR. It can change to high rates after some time. The exact details can be found in the credit card offer. People generally take advantage of the low introductory APR's and make large purchases.

Reward Cards

These cards usually give the customer incentives or rebates and even cashback for the amount they spend by their credit cards. There are various types of reward cards. Some of the most popular are:

Airline reward cards

These give incentives towards purchases on air travel, like frequent flyer or airline miles credits. The incentives can be points based or cash based which can be redeemed towards further air travel or as provided in the credit card offer. The exact details about the offer can be obtained from the terms and conditions of respective credit card.

Cash back credit cards

You get cash rewards for using these credit cards. The rates at which companies give cashback vary. It is a very good credit card for those who follow their repayment schedule religiously. If used properly it can return a significant amout of money back to the customer.

Gas reward credit cards

These give incentives towards purchases on fuel for automobiles and other vehicles. The incentives can be points based or cashbased which can be redeemed towards as described in the credit card offer.

Bad credit or credit Repair cards

These are specifically designed for those with bad credit. The interest rates for these cards are high but there are a few other options open for those with poor credit. Following the repayment schedule will help the customer in reviving his/ her credit ratings.

Secured credit cards

These credit cards require collateral for approval. Available for those with poor credit these cards offer an option to rebuild credit history. The collteral can be anything ranging from property, jewellery, car, or any other valuable good acceptable with the credit card issuer. These cards come with extra fees and strict repayment options.

Prepaid or stored value credit cards

The entire amount stored in the credit card has to be paid in advance to the credit card company. These cards are also known as debit cards. These types of credit cards do not have any finance charges and help avoid the credit card debt because you can only spend what youu have. These cards are a purfect budgeting tool.

Business credit cards

These are cards tailored to business credit needs. Coming with special business incentives like higher credit limits, special business rewards, and additional cards for employees they help streamline the business processes. The offer and promotion varies with every credit card and issuer.

Student credit cards

These credit cards are usually the first step towards building a credit history. Tailored specifically to the needs of the students these cards generally require no cerdit history. Helpin students with the much needed finance, these cards come with a low interest rate and easy repayment options.

It is strongly advised that a customer should first discuss his financial needs with a consultant and thoroughly acquaint himself of all the terms and conditions before getting any credit card. o matter what type of credit card you choose, be sure to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card.

Matthew Fisher, providing the best credit card advice and offers [http://www.card-city.com/Chase.html] is a freelance journalist having expertise in credit cards and finance. His lucid and informative articles help readers gain insight into the concerned matter and take better decisions.

Secured or Unsecured Credit Cards are Options for Bankruptcy Reports

If you are considering applying for a credit card after having gone through bankruptcy, the best advice is to apply for secured credit cards that initiate collateral usage for the credit card application other than applying for unsecured credit cards.

Have you ever wondered how secured and unsecured credit cards differ from one another? By the word itself, you know that the secure credit cards are secured while the unsecured credit cards are unsecured. The secure credit cards uses your saving accounts as collateral, usually starting from five hundred dollars or more that the credit card issuer use to determine credit limits for you, and as mentioned used for collateral purposes if there is a default in payments. For instance, in your savings accounts you have the amount of $500 dollars that can be used as collateral used for possible problems that are most likely to occur that can result in default payments. When you default, the card issuer automatically deducts the payments in your savings account to pay for the credit card.

Unsecured credit cards are also an option for those in need of a credit card but application for these credit cards may be difficult due to related bankruptcy problems. In applying for unsecured credit cards you are required to fill in an application form that is based on your income, credit report, and other necessary information stated on the application form that credit card issuers need to grant approval to your credit card application. These credit cards are approved with credit limits based on your income and credibility. Although applying for unsecured credit limit does not entirely mean that you are qualified for the unsecured credit card, instead applications are also based depending on the credit card issuer's guidelines too.

In cases like bankruptcy, applying for secured credit cards are best. Besides, unsecured credit cards depend on the history of your credit, lessening your chances for unsecured credit cards. The moment the credit card issuers learn you have a record of bankruptcy in file, the issuer will definitely be questionable and may not grant you a credit card. On the other hand applying for secured credit cards have higher chances in getting a secured credit card whereas unsecured credit cards are difficult to apply for due to credit report such as bankruptcy.

Many companies offer secured credit cards that you may consider great, but the truth is all secured credit cards can be strenuous and could make troubles for you. Secured credit cards are not all the same therefore consider researching the different types of secured credit cards in limiting your choice by applying for the best credit cards. There are some criteria mostly important before applying for secured credit cards.

The following criteria you should consider are low interest rates, application fees if any, and be sure that a secured card issuer informs all three credit bureaus about the application. You should consider searching for secured credit cards that has low interest rates and no application fees included. Also, the important thing to remember is all secured credit cards should be reported at all credit bureaus for approval.

Applying for the right credit cards need time and effort for researching different types of credit cards offered by companies. If you feel that you are still not satisfied with secured credit card, you can also try unsecured credit cards. However, because of a bankruptcy background, the best to apply for credit cards are secured credit cards.

Choosing the Right Credit Card for You

Credit Cards are a fixture in today's life. People from all walks of life use them for almost any and every financial transaction, from paying monthly bills to purchasing items off the shelf at groceries and convenience stores. No matter where a person goes these days, excepting perhaps for the absolute remotest corners of the earth, credit cards have become as acceptable as money, more so in some circumstances, because in foreign countries a credit card takes care of the usual bother of having a lot of travel funds converted into local currency.

But with so many different credit card providers out there, and each with their own sets of package deals that offer different credit card rates and advantages, how do you go about choosing one that suits your personal needs? Here are a few simple things to keep in mind when selecting a credit card that will give you the best rates for your lifestyle.

Look at the TYPE of card you'll need. While it may seem like a credit card is a credit card, in reality there are many different types of cards available, just as in a bank there are many different types of accounts, each offering different features. Some of the more common types to choose from are as follows:

Student Credit Cards - As the name implies, these credit cards are designed to cater to the needs of students. Since students generally operate with limited personal funding, the credit ceilings offered by these cards is set to keep purchases made by students within a reasonable level. Also, the interest rates are set to lower levels, again because of the assumption that the people who use these cards wont have as much financial capability. They will generally be working part-time at best, so the rates these cards offer tend towards the reasonable. The biggest drawback to a student credit card is the credit ceiling; this, however, isn't such a drawback when you consider that the lower ceiling also allows the users to preserve their credit standing and not jeopardize themselves with overspending. If applying for a student credit card, look for ones with reasonable interest rates balanced with a credit limit that will keep expenses within the budget.

Business Credit Cards - These cards are tailored to be used by people running a business. The main purpose of these cards is to be utilized in place of a business owner using his/her own personal credit card to help pay for the overhead costs of his/her business. Business credit cards generally have larger credit ceilings than regular credit cards due to the expected expenditures involved in operating a business. The rates for these cards, and the corresponding credit ceilings, are usually based on the financial status of the business entity for which the card is meant. When looking at these cards, keep in mind the projected fiscal ability of your business. Get a business credit card that can cover your overhead costs, and make sure that the interest rates are also at a level that your projected income can cover.

Zero-interest Credit Cards - these are credit cards that have 0% interest initially. The name does not mean that the card permanently does not incur interest; rather, these cards have an introductory period, usually stretching between 6 months to a year, where no interest is incurred. Regular rates are applied after the period is over, however, so it's a good idea to look at the interest rates and available credit ceiling after the initial introductory period expires.

Low Interest Credit Cards - these credit cards generally have a lower interest rate than others; unlike zero-interest cards, which offer no interest rates for an introductory period then switch to regular rates afterwards, low interest credit cards maintain a lower interest rate on credits incurred throughout the lifetime of the card. In the case of these cards, look at other factors when choosing one; there may be annual fees involved in maintaining the card, or lower credit limits, for example. Look into these when deciding on a low interest card to apply for.

Reward System Cards - these are credit cards which possess additional perks for usage. There are many types, including credit cards that offer airline mileage points, hotel credit rewards, gasoline points, and even cash reward credit cards. When looking at one of these credit cards, the interest rates of the card should of course be taken into consideration, but the main point is to see if the interest rates are offset by the rewards offered. AS long as the rewards suit your lifestyle, these cards make for a good option.

These are just a few simple tips covering the different types of credit cards available on the market. When choosing a credit card, finding the best credit rate isn't just a matter of looking for low interest cards; find one that suits your lifestyle and needs, and the rest follows.